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"We must destroy the village in order to save it" = MilSpeak for The Viet Cong have so infiltrated everything that we can no longer differentiate between friendlies, civilian bystanders and enemy combatants. Which meant, "Call in the BUFFs for a complete carpet bombing to erase it." Same thing goes with a really complete virus/malware pwnage, burn it to the ground to kill the anthrax and start again.
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Fiasco LabsMar 13 '13 at 1:00

4 Answers
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The phrase nuke it from orbit basically means to wipe your system and start from a clean slate. What that clean slate might be differs in different situations.

If you perform regular backups of your system, which you should, restoring from a previous backup might be possible IF you were able to use forensics means to discover the time of infection. Restoring from a backup point before you got infected will be safe enough.

Of course, if you do not keep regular backups, you are in for a world of hurt. If you have important files on the system, you must diligently analysis each and every single file and ensure that it isn't infected before transferring it to the new, clean system. This is difficult.

so nuking is more robust removal method as opposed to restore points? How is it different from format and reinstall? Or does it also include reinstalling of the firmware for routers in case we are talking about servers and networks?
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user13267Mar 13 '13 at 0:57

Yep. Less chance of residual infection from infected backups. You should be aware of malware that's persistent in things like the BIOS as well, in which case Nuke it might mean scrap the hardware as well!
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NULLZMar 13 '13 at 0:59

"Nuke the site from orbit - it's the only way to be sure" is a quote from the movie Aliens, in which the protagonist suggests that an infestation of xenomorphs is so pervasive that a nuclear response is the only sure way to destroy it.

In the context of having your computer infected by a virus: even if malware seems to be removed, it may not be - and the only way to be sure it's completely gone (and even then it's hard to be 100%) is to completely wipe the system and start fresh.

We all know what happens when you don't nuke Xenomorph's from orbit. Don't expect any better from malware.